Egypt - The Financial Regulatory Authority (FRA) has announced that the consortium led by Beltone Capital has taken the first steps toward obtaining a credit rating licence.

The move aligns with the FRA’s ongoing efforts to study and address market needs to enhance competitiveness and attract investment.

According to a statement released by the FRA on Monday, the Beltone Capital consortium achieved the highest score based on the evaluation criteria for securing a license to conduct securities evaluation, rating, and ranking activities. This decision was based on the conclusions of the licensing committee, following the FRA’s resolution issued in August 2023. The consortium was formally notified on 24 June 2024, to proceed with the establishment and licensing processes for what will be Egypt’s second credit rating agency.

The FRA’s Decision No. 151 of 2023 opened the door for new applicants to obtain a single license for conducting securities evaluation, rating, and ranking activities, reflecting the capital market’s needs. Companies that applied for the licence were evaluated based on specific criteria to ensure maximum transparency and impartiality.

Licensing a new credit rating agency, alongside the currently licensed company, is expected to strengthen the non-banking financial sector, boost competition, and enhance market stability. This initiative will benefit all market participants, including institutions and individual investors, particularly amid growing demand for bond issuances, especially securitized bonds.

Investors rely on credit rating agencies to guide their investment and financing decisions. To ensure the quality and reliability of these ratings, credit rating agencies are subject to regulation, licensing, and oversight by relevant regulatory authorities in various countries, under a strict legal and regulatory framework.

The FRA reaffirmed its commitment to continuously assess the needs of non-banking financial markets, keeping pace with international practices to enhance market competitiveness and increase its attractiveness to investors.

The authority also urged all news websites to ensure the accuracy of information related to its activities before publishing, following recent reports on the subject, highlighting the importance of verifying details before dissemination.

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